Conservatives’ wraparound childcare scheme underspent by a fifth

The Conservatives’ wraparound childcare programme underspent by almost a fifth, with affordability challenges and a lack of demand from parents hitting school take-up.

The wraparound childcare programme was announced in the 2023 spring budget by Rishi Sunak’s government.

It aimed for all primary-aged children to be given access to childcare between 8am and 6pm during term time by September 2026, in a bid to help parents return to work.

Of the £289 million in funding for the scheme, £274 million was handed to councils to help set up or expand provision.

It was allocated over three financial years, starting from 2023-24 and terminating in March 2026.

But a freedom of information request revealed that around £222.5 million – 81 per cent of the total budget – was actually handed to councils after the grants were adjusted based on demand.

The Department for Education said the scheme “delivered exactly what we said it would” and created more than 120,000 new places across England.

“Now that provision is set up, we will support local authorities to ensure parents have a range of school-aged childcare options in and out of term time, as we make high-quality early years education more accessible and affordable.”

How did the scheme work?

The wraparound childcare programme launched nationwide in September 2024, with councils being told their maximum total funding allocation the previous October.

It was calculated to be proportionate to the number of primary schools in their area that did not have any childcare provision, using school census data.

Councils then had to map supply and demand for wraparound childcare in their area, which involved working with local childcare providers to work out where places were needed and how many they would need.

They also had to develop a delivery model, such as having school-led provision on a school site, private provision on or off a schools site or a local nursery taking school-aged children during wraparound hours.

Ahead of each grant payment, councils submitted a costed delivery plan based on the findings of the mapping out supply and demand. They also had to include an assessment of risk and of how sustainable the wraparound provision would be in different areas.

The DfE would then adjust the grant funding given to the councils compared to what they were initially allocated. Councils were given five grant payments over the course of the programme.

They also had to submit a statement of grant usage to the DfE at the end of each financial year in 2024, 2025 and 2026.

This statement included the indicative grant funding from the DfE in that financial year, how much the council spent and provided an explanation for any underspend.

How much did councils receive?

In the first year there was £2.9 million in grant allocations, but the bulk of the funding – £185 million – was allocated for 2024-25.

While all the funding for the first year of the programme was spent, in the second year 94 per cent of the total allocated was actually taken by councils.

The final year of funding totalled £86.2 million. But only 53 per cent of that sum was actually handed out.

The unspent cash – more than £50 million – was returned to DfE budgets.

Birmingham was allocated over £7.4 million. But in the end the council took just 57 per cent of this total sum.

While it took the full amount available in the first year, in the second year it took 82 per cent of the available funding, and none of the funding in the final year.

Essex took the full amount it was allocated for 2023-24 and 2024-25, totalling almost £4.8 million for both years.

But like Birmingham it did not take any of the funding it was allocated in the final year of the programme, which meant it took just under 69 per cent of the three-year allocation. The council said that was due to lack of demand from schools.

The DfE’s guidance for councils noted that programme funding “is designed to reduce each term”, because the funding is being used to set up new and expanded places.

As these places are filled, the income from parental payments increases and the need for grant funding reduces.

Now the programme has ended, providers will continue to cover running costs for paid-for-places from the fees paid by parents.

Affordability and demand ‘significant challenges’

Unlike Labour’s breakfast clubs programme which is free at the point of use, the wraparound childcare programme can only be used to create fee-paying places.

Councils were also not allowed to use the wraparound funding to subsidise the cost of places.

Birmingham found that “affordability and sustained parental demand remained significant challenges in some communities”, based on feedback from providers and the council’s internal evaluations.

And some schools “expressed concerns about financial sustainability when projected attendance numbers didn’t mean the demand specified in the outset”, which meant less schools were willing to apply for funding.

But the council found that the programme succeeded at supporting schools that wanted to establish their own provision and respond to parental demand.

Birmingham reported that the main ways that the schools spent the funding was on staffing costs, recruitment and workforce development, resources and equipment, rent, and start-up and operational costs associated with establishing provision.

One primary headteacher in Greater Manchester, who wished to remain anonymous, said most of the funding was used in increasing staff capacity both for morning and after-school intervention.

 “This has allowed us to expand the breadth of support we can offer to our pupils during these crucial times of the day.

“We have also made effective use of our early years (nursery) base to facilitate our before and after school provision. This has proven to be a practical and efficient approach, enabling us to deliver wraparound care whilst making best use of our existing facilities.”

But they added that the funding did not cover essential infrastructure improvements due to expanded provision. The school is having to fund additional toilet facilities within the nursery to accommodate the increased provision.

Unused cash should be spent

Frank Young, chief executive officer at charity Parentkind, said: “Working parents need good wraparound care, it is often the only way to balance work and school, which is a constant headache for parents.

“Any unused cash should be handed to schools to help ease the burden on parents, particularly in deprived areas.

“We hope that schools or councils where this money would be particularly helpful could be identified and pro-actively offered the money. Additional capacity with wraparound care would help working parents.”

When the programme was announced in 2022, around 60 per cent of primary schools in England already offered wraparound childcare, both before and after school.

Since 2025, more than half (51 per cent) of primary school leaders said they could meet demand for wraparound childcare “all of the time”, and 32 per cent said they could meet demand “most of the time”.

Just 3 per cent said they were never able to “fully meet the demand”.

Of that figure, 42 per cent said they were unable to recruit enough staff, another 42 per cent said they lacked the space in schools, and 24 per cent said they could not meet the needs of low-income parents.

Another 23 per cent said they could not meet the needs of pupils with SEND.